Weibo Shares Fall After Company Commences ADS Offering

By Stephen Nakrosis

Shares of social media company Weibo were trading below recent 52-week lows in the after-hours market following news the company commenced an offering of American depositary receipts, which it intends to loan to an affiliate of the offering's underwriter.

Concurrently, Weibo is offering an aggregate principal amount of $300 million in convertible senior notes due 2030, it said Wednesday.

At 5:15 p.m. EST, Weibo ADSs were trading 7.2% lower at $10.50 each. They ended the day's regular session with a 3.1% loss at $11.32 each.

On Nov. 10, the ADSs hit a 52-week low of $11.05 each.

The underwriter's affiliate will sell the borrowed ADSs in a separate offering, Weibo said, and the company won't receive any proceeds from the offering, but will receive a nominal lending fee "which will be applied to fully pay up the Class A ordinary shares underlying the borrowed ADSs." That sale is conditioned on the closing of the notes offering, Weibo said, adding if that offering isn't consummated, the ADS lending agreement will terminate, and all borrowed ADSs must be returned.

Weibo also said it "believes that the borrowed ADSs will not be considered outstanding for the purpose of computing and reporting its earnings per ADS under the current U.S. generally accepted accounting principles and, therefore, the company believes that no dilution will occur as a result of the borrowed ADSs."

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

November 29, 2023 17:55 ET (22:55 GMT)

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